Giottus, an Indian crypto exchange, has taken a bold step to mark its impression in the crypto sector and make it to the headlines. Amid silence from rival crypto exchanges on the subject, Giottus has said that it will provide proof of reserves in order to add another layer of transparency to its business operations in the country. Proof of reserves are documents and evidence that demonstrate that a crypto exchange has sufficient assets to handle all withdrawals in cases of emergencies.
Digital currencies were slammed this week after the FTX crypto exchange was thrown into turmoil this month due to lack of liquidity.
The sequence of events slashed the total crypto market cap to $857.16 billion (nearly Rs. 69,27,325 crore) from its trillion-dollar valuation in the last two days, owing to bubbling sentiments of fear and distrust in the global crypto community.
Amid the chaos, Giottus has said that it was ready to provide proofs of internal finances to maintain the trust of its users.
“We are working on it. As a matter of fact, it's high time, we all did. We should have something within the next three months. This is also an ideal point for regulators to start looking at providing proof of reserves from exchanges as part of their filings,” a Coindesk report quoted Giattus as saying.
The platform, founded in 2017, has agreed to publicly publish their fund reserves or do a ‘Merkle tree' proof of reserves. The ‘Merkle tree' proof is a cryptographic data structure that maintains privacy but allows users to verify the stability of their holdings on exchanges, thereby creating trust.
As of now, other Indian exchanges including CoinSwitch Kuber and WazirX have not addressed their stance on providing proof of reserves.
India, by several industry experts, has been touted among the nations with most potential to explore and develop the crypto and Web3 technologies.
Johnny Lyu, the CEO of KuCoin crypto exchange, recently told Gadgets 360 that India is among the best producer of computer coders in the world and majority Indian engineers who are swarming towards Web3 are proficient in those computer languages that are required to tilt and shift the blockchain technology as we know it today.
India's crypto activity churned $172 billion (roughly Rs. 13,85,800 crore) in cryptocurrency-related activities from July 2021 through the June of this year, a Chainalysis report released in September claimed.
A new crypto advocacy group called Bharat Web3 Association (BWA) has been launched in the country in a bid to monitor the growth and development of these nascent technologies.
Meanwhile, data oracle provider Chainlink has taken the opportunity to promote its proof-of-reserve tools.
The company claims this proofing could solve the transparency issues currently plaguing the industry.
Cryptocurrency is an unregulated digital currency, not a legal tender and subject to market risks. The information provided in the article is not intended to be and does not constitute financial advice, trading advice or any other advice or recommendation of any sort offered or endorsed by NDTV. NDTV shall not be responsible for any loss arising from any investment based on any perceived recommendation, forecast or any other information contained in the article.
Affiliate links may be automatically generated - see our ethics statement for details.